More than 1,700 tonnes of teak, largely evading economic sanctions, were exported to the United States from Myanmar after the Southeast Asian country’s military seized power in a coup last year, a watchdog group says.
Shipments over the past year of the coveted hardwood prized by luxury yacht builders were nearly the same as in 2020 despite US sanctions imposed on Myanmar’s largest state timber company, Myanma Timber Enterprise, nearly three months after the February 1 military takeover.
The timber trade helps finance crackdown and human rights abuses, according to Justice for Myanmar, an advocacy group that investigates trade dealings by the nation’s armed forces. The security forces have killed more than 1,400 people since the democratically elected civilian government was deposed. Atrocities by the military are on the rise, particularly in the border regions of Myanmar where armed resistance has intensified.
“Myanmar’s continuing timber trade supports the illegal military junta that is committing heinous crimes with complete impunity, including the indiscriminate killing of children,” Yadanar Maung, spokesman for Justice for Myanmar, said in a statement following the release of the report by the group. “We call on the US government to ban all imports of wood from Myanmar to prevent more revenue from reaching the illegal military junta.”
The Myanmar government generated $ 100 million in taxes and royalties on the timber trade during fiscal year 2017-18, according to the latest data available published by the Extractive Industries Transparency Initiative. Wood, along with oil, gas, minerals and gemstones, form the backbone of the country’s natural resource industries. The board intends to exploit and export them to prop up an economy in free fall after months of unrest.
Last year, the military, also known as the Tatmadaw, conducted several auctions to sell hardwood, including teak, from a stock of 200,000 tons of illegally harvested timber seized by the previous civilian government. Some of that timber is believed to have been shipped to the US through intermediaries, Justice for Myanmar said. Eighty-two shipments of teak were exported last year, consisting mainly of boards and scantlings used for shipbuilding, exterior decking and furniture, according to the watchdog group, whose findings were obtained from the Panjiva trade database.
Myanmar, also known as Burma, is the source of what is considered the finest teak in the world due to its durability and smooth surface. British colonial companies used elephants in the 19th century to plunder Burma’s forests for tropical hardwoods to outfit Royal Navy ships with teak. Even today, elephants are common in logging operations in forests inaccessible to vehicles.
Timber demand from Thailand, China, India and Europe exploded in the 1990s, prompting an increase in illegal logging and multinational corruption that enriched the military elite and financed insurgent ethnic groups along Myanmar’s borders, according to the London-based Environmental Investigation Agency, which has discovered extensive criminal activity in the industry.
Rampant deforestation led to the loss of nearly 29,000 square miles of forest in Myanmar between 1990 and 2010, representing 19% of the country’s forest cover or an area larger than Ireland.
It wasn’t until 2014 that the government banned the export of teak logs. Activists say that with the military now in power, the ban is in jeopardy: “The coup has just exacerbated and allowed a greater space of crime in which the main speculators will be the junta,” said Faith Doherty, head of forestry campaigns. in Environmental. Investigation Agency.
Even before last year’s sanctions, importing wood from Myanmar was risky for buyers from the West. The US Lacey Act and the European Union Timber Regulations prohibit the importation of illegally sourced timber and require a level of traceability that is difficult to verify in Myanmar’s corruption-ridden supply chain.
The US blacklisting of Myanma Timber Enterprise on April 21 effectively amounts to a Burmese timber ban. The state-owned company is the official clearinghouse for Myanmar’s timber industry, operates sawmills and oversees exports.
“The forest industry in Myanmar is effectively controlled by MTE,” said Justice for Myanmar, calling for a ban on Burmese timber because importers can still use intermediaries to illegally circumvent the sanctions on Myanma Timber Enterprise. The group is urging the US to investigate last year’s teak shipments, including the banks and logistics companies involved in the transactions.
The Justice for Myanmar report shows that nearly half of the 1,725 tonnes of teak imported into the US last year after the coup were purchased by East Teak Fine Hardwoods in Donalds, South Carolina. Another 15% was imported by J. Gibson McIlvain, a lumber wholesaler in White Marsh, Md. Both companies have been among the largest US importers of Burmese teak. during years, using the hardwood for boat decks, floors and siding.
Neither firm responded to a request for comment. In their website, J. Gibson McIlvain says it has relationships with Burmese mills and exporters that “go back centuries” and that it complies with government regulations.
“The relationship between the US and Myanmar is confusing, and it is imperative that we stay abreast to ensure that we are importing timber legally to protect our customers who buy from us,” the website says. Shannon Rogers, the company’s chief marketing officer, recorded a podcast shortly after the sanctions against Myanma Timber Enterprise were announced, alternatives to teak were discussed.
“You can’t buy Myanmar teak without going through the MTE,” he said, adding that the junta was “killing women and children” and making the Tiananmen Square massacre seem “Romper room”.
Other companies named in the report with a much smaller share of imports include Lumberbest from Alhambra, Kingsley Bate from Manassas, Virginia, and World Panel Products from Riviera Beach, Florida.
In an email, Clay Kingsley of Kingsley Bate said his purchases were legal and consisted of “some containers” of furniture, not wood.
Jeff Davies of World Panel Products said its imports were legally purchased before the coup through exporters vetted by the International Wood Products Association. “We vehemently oppose any human rights abuse and any direct correlation or link with governments like the current board,” Davies said in an email. The trade association did not respond to a request for comment.
Lumberbest also did not respond to a request for comment.
Since the coup, the United States has imposed sanctions on dozens of Tatmadaw officials and associates, military conglomerates, and companies in the mining and gem industries. The calls grow extend sanctions on Myanmar’s multi-billion dollar oil and gas industry, the country’s largest source of foreign exchange.
The U.S. Treasury Department’s Office of Foreign Assets Control, which is responsible for enforcing the sanctions, declined to comment on the teak findings in the Justice for Myanmar report.
“The laws surrounding compliance with international sanctions are notoriously complex and their enforcement is hampered by limited resources and political fad,” said Timothy Stanley, Asia director at Risk Advisory Group consultancy. “Many smaller companies are likely to run a calculated risk that insufficiently resourced law enforcement authorities will not carry out sanctions investigations against them for trading with Myanmar. But it increases the credibility that these same companies are unaware of the prevailing sanctions environment and the potential legal and regulatory risks of violating them. “